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Court stays publication of cut-back power price


Tuesday 26th July 2011

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Four months after prices Genesis Energy charged for electricity from its Huntly power station spiked to nearly $20,000 per megawatt hour, the High Court has ordered a stay on publication of the final power price for March 26.

The Electricity Authority later ordered those very high spot market prices to be cut back to a maximum of $3000 per megawatt hour, and was planning to publish that as the final price when court action was taken against it yesterday.

The authority said today that Contact Energy had asked it to delay publication of the final price, and that the High Court had blocked it from setting the new price until after an August 16 hearing on the issue.

The authority contracts out to publication of final prices to sharemarket operator NZX.

It had previously found an undesirable trading situation (UTS) arose when national grid operator Transpower closed part of the grid to upgrade lines into Auckland.

The subsequent price-spike led to 35 claims of a UTS and criticism of the behaviour of Genesis Energy at the time.

A combined appeal from Bay of Plenty Energy and Todd Energy, and appeals from Contact Energy and Genesis have been filed in the High Court at Wellington.

Genesis said the authority's decision to take corrective action affected the final prices achieved by Genesis for the electricity it supplied.

It alleged that the authority erred in law by applying a wrong legal test, or misdirected itself as to the correct legal test in determining that a UTS had developed, Genesis said.

The combined appeal from Bay of Plenty Energy and Todd Energy said the authority failed to properly identify the contingency or event said to comprise the UTS.

It also said the authority wrongly concluded that any such contingency or event threatened, or might threaten, trading on the wholesale market for electricity.

Contact Energy's appeal said the authority applied too low a threshold for determining what was outside the normal operation of the wholesale electricity market.

Justice Robert Dobson said that Meridian Energy and Mighty River Power were seeking to be joined as respondents to the appeals -- a move opposed by the appellants -- and the Electricity Authority expected to be named as a respondent.

The August 16 hearing would determine the status of all parties who filed documents by August 8, and there would also be a hearing of applications by Bay of Plenty Energy and Todd Energy for a stay of the effect of the Electricity Authority’s decision.

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